International Business - Global Marketing Essay Example | Topics and Well Written Essays - 750 words

International Business - Global Marketing - Essay Example Most firms will be reluctant to enter countries that have high political risks unless the potential returns are high or when countries with high political risk are providers of raw material that are in short supply. Thus, inflation rates, balance of payments, exchange rate stability, government budgets and the record of growth will be considered to evaluate the prospects for economic instability or crisis. Environmental scanning, strategy development and consistent market and global industry monitoring are the main steps for successful operation oversees (Keegan, Green, 2003). 2. The organizational theory/management has a long history goes back to ancient times. The main stages of management history development coincide with the traditional stages of historical development. The first is the Ancient history including Sumerians, Egyptians, Babylonians (Hammurabi's Code), Hebrews (Jethro), when private merchants appeared. Scalar and Exception Principles were the core of management. It is possible to include the primitive stage into this classification, when collecting and primitive trade (interchange) existed, but this management process was not conscious, but rather intuitive. In Ancient East, China developed management thought based on a class principle (division of labor), generic and distinct management styles. Further, Alexander the Great developed a staff principle. During Medieval Period delegation principle and Mercantilism were developed. In their works Machiavelli and Thomas More discussed the principle of ideal organizational structure. Industrial period has lasted from 1765 to present time. This period is marked by a free market system of production, corporate culture and integration (R. Owen, A Ure). The XX century has evolved the main concepts of contemporary management practice utilizing the previous knowledge (Keynes). (Minor, 1995). 3. a). A company should use international division when it achieves competitive advantage in a national industry and requires executives and managers to maintain a well-defined strategic focus abroad. Their task is to guide marketing efforts, coordinate and direct activities and monitor economic environment of a country to predict possible opportunities and threats. International division will be able to maintain a strict control over trade and administrative activities in a foreign country, and reach wider target audience implementing advertising and promotion activities. A single organizational unit will help to deal with special environment of a foreign country. The international division cannot solve the problems of another layer of management if its budget is inadequate to this task. It cannot solve the problems outside its regional location (Keegan, Green, 2003). b). Global product structure is often considered as a separate marketing context requiring adaptations of the product, its price and the way it is promoted to account for differences in cultural expectations or constraints imposed by the governments of nation states. Geographic approach allows a firm to select particular markets similar to their organizational arrangements, which help to avoid a failure if products are not tailored to local markets. Such differences have led many firms to appoint local agents in different countries to

Empirical Techniques in Econometrics Essay Example | Topics and Well Written Essays - 2500 words

Empirical Techniques in Econometrics - Essay Example Econometrics is the application of statistical methods for solving the financial issues. It has many applications like – the effect of the economic conditions on the financial markets, the asset price derivations, predicting the future financial variables and other financial decision-makings. In econometrics there is a lack of adequate test data for applying the particular methodology, this is termed as the small samples problem. There are further constraints in Econometrics with respect to data revisions and the measurement error. These problems are generally faced due to the subsequent revisions in the reference data and the incorrect data estimation or incorrect measurement of data. The frequency of observation of the financial data has far-reaching implications. For the sake of understanding, just imagine the example of the prices of stocks in the share market, they are highly volatile and keep on changing every day, hour, minutes and so on. So to have precise knowledge of these prices one needs to have large quantum of data, in tens of thousands or in millions. Financial data are very noisy in the sense that it is highly difficult to draw a certain pattern or trend from the available data. In other sense the data doesn’t have a specific distribution. But approximations are applied for modeling of the market and for analyzing the future trends, values of financial variables.... sections, e.g. the weekly prices of mid cap shares over the period of five years. Cointergration: The macroeconomics and financial economics has empirical research based on time series. The macroeconomic time series has a nonstationarity property, which means that the variable doesn't return to a constant value or a linear trend. The stationary processes has a basic tendency of moving around a linear value i.e. the mean value and its fluctuation from this value is termed as the deviation. The variables such as employment, asset prices, gross domestic product follow a nonstationarity property and possess stochastic trends. Consider the trend in the financial return series like the rate of change of daily exchange rate. The figure shows the volatility of returns. Fig.1 Earlier it was a general practice to estimate nonstationary process equations in macroeconomic models by the simple linear regression. Clive Granger (1981) proposed a solution to the time series by a simple regression equation: (1) where, = dependent variable = single exogenous regressor = white noise To stress the solution, Granger defined the degree of integaration of the variable. Suppose a variable can be made nearly stationary by differencing it d times, then it can be termed as integrated of order d or I(d). Stationary random variables are I(0). In equation (1), if I(1) and I(1), then I(1). But there exists an important exception, if I(0) then I(0). The linear combination, holds same statistical properties as an I(0) variable. This